AVCJ

Alteria closes debut India venture debt fund at $140m

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Alteria Capital, an Indian venture debt firm established by InnoVen Capital co-founders Ajay Hattangdi and Vinod Murali, has closed its debut fund at INR9.6 billion ($140 million), beating the INR8 billion target.

The majority of the LPs in the fund are domestic, Hattangdi told AVCJ, including IndusInd Bank, the Small Industries Development Bank of India (SIDBI), and the Azim Premji Foundation. Several Indian entrepreneurs participated in a personal capacity, such as Flipkart co-founder Binny Bansal and SPI Cinemas CEO Kiran Reddy. SIBDI's investment represents its single largest commitment under the government's Startup Fund of Funds program.

"I think the Indian LP base is finally waking up. They've become much more interested in investing in the Indian venture ecosystem in the last year or two, and in learning about what the early-stage space is like," Hattangdi said. "Yields have been falling on the fixed income side, and there's a lot of uncertainty about the credit quality of debt instruments that investors have access to, so they've naturally gravitated to this asset class as a way to earn strong returns from high-quality debt investments."

Alteria targets start-ups raising early and growth-stage capital, typically investing alongside other investors. Since its first close last year the firm has committed more than INR6 billion across 28 transactions, backing the likes of fintech platform Lendingkart, fashion retailer Universal Sportsbiz, and food delivery platform Faasos.

Hattangdi and Murali founded InnoVen in 2008 as SVB India Finance, the India arm of US-based Silicon Valley Bank (SVB). SVB sold the business to Singapore's Temasek Holdings in 2015 for INR3 billion, after which the name was changed to InnoVen. The co-founders left in 2017 as InnoVen was launching branches in Southeast Asia and China, and started Alteria in order to focus exclusively on the India market.

In addition to financial backing, Alteria also provides operational support to start-ups through the Activate platform launched last year. The platform provides start-ups with connections to large corporate players, investors, and other emerging technology developers that can help unlock business and investment opportunities. The team claims to have made over 100 connections for start-ups both within and outside of Alteria's portfolio.

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